As it faces increased competition from services like Apple Music and Spotify, SoundCloud is reportedly running out of money. According to a new report from Recode, SoundCloud has been trying to raise more than $100 million since last summer, but has ultimately been unable to do so…
News of SoundCloud’s struggle isn’t necessarily new, but this is the first we’ve heard of the extent of the company’s problems. Today’s report explains, however, that SoundCloud believes there is an upside to its recent struggle raising money. The company thinks that it can now sell for less than $700 million, the valuation it was given back in 2014.
SoundCloud will reportedly consider bids higher than around $250 million, which is the total investment the company has raised to date:
The upshot, according to people familiar with the company: SoundCloud is now at a point where it may sell for less than the $700 million investors thought it was worth a few years ago. One source thinks it will consider bids, as long as they’re above the total investment it has raised to date — about $250 million.
SoundCloud hasn’t given an update on its user base since 2014 when it said it had 175 million unique visitors. The company did, however, recently introduce a new cheaper “SoundCloud Go” plan the costs $5 per month.
Last fall, it was reported that Spotify was interested in acquiring SoundCloud, but the two parties were unable to reach a deal. SoundCloud has also held talks with Google in the past, but again, without success. It was said that Google was mulling a deal as valuable as $500 million.
It’s unclear how much SoundCloud was willing to sell for when it hold talks with Spotify, though. Perhaps now that it has lowered its price, it can revisit those talks.